A Plan to Empower More Than One Million Women

Elizabeth L. Littlefield
President and CEO of the Overseas Private Investment Corporation, the U.S. Government's Development Finance Institution

Bob Annibale
Global Director, Citi Community Development and Inclusive Finance

There is a story that persists around the developing world, to the detriment of families and entire economies: Women are being sidelined from economic progress because of limited access to financial services.

Savings accounts. Loans. A mobile wallet. Insurance. These aren't just tools for transactions, they are platforms for financial independence. Collectively, they can help advance gender equality and economic mobility. Women are so often the ones who manage all sorts of family finances, from the household bills to saving for their children's education, to funding working capital for micro- and family businesses and farms. But financial services, often reserved for men or the wealthy, provide options and the opportunity to better plan.

International Women's Day is an important time to consider solutions to empower women financially. For Citi and the Overseas Private Investment Corporation (OPIC), that solution has come in the form of an innovative partnership designed to provide microfinance loans in some of the world's poorest places. As the U.S. Government's development finance institution, OPIC has extensive experience supporting development in emerging markets. Citi has a strong global presence. Through their risk sharing program, Citi provides funding for microfinance lending in local currency -- which is key to ensuring borrowers will be able to repay -- while OPIC shares the risk.

So far, Citi and OPIC have provided about $386 million in loans to more than 40 microfinance institutions in more than 20 countries. More than one million women have benefitted.

For example, in India, Citi has a $5 million loan facility, partially guaranteed by OPIC, with Ujjivan, a microfinance institution which provides microloans to India's female urban micro-entrepreneurs, as well as ongoing guidance and support to expand the financial capabilities of its clients.

Shubhangi Dhobale, an entrepreneur in the city of Pune, is one client who has built a paper goods business with her husband and now employs additional women from their neighborhood. Amirum Begum is another client. She took out an Individual Agriculture Loan to farm a plot of land and earn money from selling its produce on the market.

Such stories of individual initiative are encouraging. While we are proud of what we've achieved, we are also acutely aware that much more needs to be done.

Across the developing world, women are 20 percent less likely than men to have an account at a formal financial institution and 17 percent less likely to have borrowed formally in the past year, according to the Global Financial Inclusion database. The International Finance Corporation (IFC) estimates the annual credit gap for female business owners, or the amount of financing they seek, is as high as $320 billion every year.

So, here are four lessons we have learned over the years that we hope will inspire and shape more efforts to reach the next one million, 10 million or 100 million women:

1. Forge New Partnerships -- The world's biggest challenges like financial exclusion will not be solved in isolation. Private sector businesses can serve as a force for good in the world by forming relationships with the public sector and nongovernmental organizations. Such relationships can enable financing to be deployed effectively.

2. Prepare to Scale -- Build scale into the strategy. Through OPIC's partial guarantee mechanism and Citi's many local offices in developing markets, we are able to grow our program at scale together. Opportunities for scale can be found everywhere. For instance, corporate supply and distribution chains are an underutilized way of supporting better access for women by leveraging infrastructure designed to move goods. This could be particularly effective in reaching women in rural areas

3. Create Opportunities for Investors and Your Business -- Develop more options or financial instruments to tap capital markets and engage the growing number of investors interested in aligning their money with their values, balancing risk and returns with mission. Make a stronger business case for the importance of such programs. We know the broader numbers of how greater female financial inclusion will improve the economy overall, but how can your business benefit specifically? A strategy that aligns economic development with corporate priorities is a strategy that is sustainable for the private sector and can have long-term impact in communities. For example, how much more could your business benefit by growing your female customer base?

4. Harness Technology -- New disruptive technologies, like mobile platforms, coupled with progressive public policies offer exciting cost-effective opportunities to expand access at a scale not deemed imaginable even a few years ago. In their 2015 Annual Letter, Bill and Melinda Gates predicted that by 2030, two billion of the people who don't have a bank account today will be storing money and making payment with their phones. This is particularly important for women's economic progress. The potential is huge: For every 100 people living in a developing country, there are about 89 mobile phone accounts, according to the UN's International Telecommunication Union.

Greater financial inclusion for women would increase savings rates, small business growth and job creation. It's good for our economies and the expansion of sustainable growth and development. It would also make money, and the use of it, safer and easier for women and their families.